Income questions? Secured loan questions???

[basketsbears]

Hi,

My husband and I are considering filing BK in May/June. Are the following items considered income? Our tax refund, I am going to graduate school and my employer reimburses for part of the tuition, I am also taking out student loans. Is the refund of the student loans that comes back to me considered income? My husband is a disabled Vet. He is going back to school and receives most of his education paid for, the VA pays for his books, and gives him a housing stipend. Are those items considered income as well???

On the means test, it seems we can put in our secured debt, but not our unsecured debt. If we do not want to keep cars, or houses for example, do we not put those expenses in, or do we count those as expenses, but then have them discharged (in Ch 7)?

I cannot find information on some of the sites about that. An attorney we talked with wanted to include everything, even though they were not considered taxable.

Thanks for any information. Of course, probably like everyone we are wanting to file Ch 7, but would probably have to go 13.

[daylate]

I'd say a refund is not income. In the six month look-back, you made,say 1k gross each month so you had 6k of income. Out of that you had 600 withheld for income tax. You over withheld so you get back $300. Your income was still 6k. But, depending on when you file part or all of your refund could be taken by the trustee unless you can exempt it. The other point to consider is that when you do the means test, you needto adjust the taxes you pay to reflect your real tax liability, not one that will produce a very large refund.
As for the student loan, from a common sense point of view, I'd say no it is not income. You still owe the full amount right, even though some is refunded? Its no different in my mind than if you borrowed some money and spent part of it and kept the rest for whatever.
On the tuition part I'd say it is income, even though it may not be taxable. It is like using pre-tax dollars to pay health insurance. It isn't taxed but it is income.
Don't know about the VA stuff but I'd be inclined to think it is income. however, you should check this site and look at part 1. If your husband was disabled during a certain time period then he is exempt from means testing. If that is the case, I'm not sure how that would affect a joint filing.
http://www.legalconsumer.com/bankrup...nolo#QuickTest

as always, this is not take it to the bank legal advice. Hopefully some others will chime in and give their input. Good luck.

[basketsbears]

Thank you for the information!

[ValleYum]

Hi basketsbears!

Is your hubby going to school via The Post 9-11 GI Bill aka Chapter 33 GI Bill?

If so, the book money is not income. The housing money is counted as income as far as the Means Test and Schedule I go.

Regarding the means test:

The “military exclusion” from the means test has two parts: The debtor must be rated by the Department of Veterans Affairs as 30 percent or more disabled, and the debt must have occurred while on active duty.

I found a lot of valuable info at the Military Times' website.

Good luck to you!!! Thanks to your husband and your family for their service and sacrifice.

[basketsbears]

Thanks for the kind words. My husband is 60% disabled, but don't think his debt was during his active duty.

Hi basketsbears!

Is your hubby going to school via The Post 9-11 GI Bill aka Chapter 33 GI Bill?

If so, the book money is not income. The housing money is counted as income as far as the Means Test and Schedule I go.

Regarding the means test:

The “military exclusion” from the means test has two parts: The debtor must be rated by the Department of Veterans Affairs as 30 percent or more disabled, and the debt must have occurred while on active duty.

I found a lot of valuable info at the Military Times' website.

Good luck to you!!! Thanks to your husband and your family for their service and sacrifice.

[sillywalks]

I'm still a newbie, but my understanding is the tax refund is considered income. My understanding is also that you can average your return over 12 months (i.e. you received $3,000 back for 12 months income, so 1/2 of that -- $1500 -- would apply towards your 6 month count back. Divide $1500 by 6 and add that to each month.

Again, I could be wrong, but I'm pretty sure this is how you need to do it. I know it's how I'm doing mine!

[basketsbears]

Thank you Silly! We had a $4200 refund and breaking it down makes it a lot easier. Thanks,

[ValleYum]

Thanks for the kind words. My husband is 60% disabled, but don't think his debt was during his active duty.

You are very welcome. My hubby isn't above 30% and our debt wasn't incurred as the rules stated re: active duty so we did not qualify to bypass the means test either. When it comes to questions about military retirement pay and VA housing benefits, etc. it was hard to find sources for information.

Good luck with everything!

[dumpinmydebt]

Can't answer in regards to your husband, but the refund you receive from you student loans is not considered income. At least, it wasn't for us. It was a cash asset. That's how we listed it (filed pro se) and the Trustee had no questions about it.